Friday 9 December 2016

Microfinance Ireland to cut lending rates for small firms

Published 18/06/2016 | 02:30

Kieran Comerford of the Local Enterprise Offices, Deirdre Parkinson of Microfinance Ireland and Richard Murphy of Enterprise Ireland at the launch of the mentoring support programme yesterday. Photo: Keogh Photography
Kieran Comerford of the Local Enterprise Offices, Deirdre Parkinson of Microfinance Ireland and Richard Murphy of Enterprise Ireland at the launch of the mentoring support programme yesterday. Photo: Keogh Photography

State-OWNED lender Microfinance Ireland (MFI) will cut the interest it charges small businesses by 1 percentage point from the start of July.

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MFI provides loans of €2,000 to €25,000 to very small businesses.

The not-for-profit body will now charge an interest rate of 7.8pc on its money, down from 8.8pc.

The company said that applicants to MFI via their Local Enterprise Office can avail of money at the discounted rate of 6.8pc.

MFI was set up following the financial crisis to provide loans for small companies at a time when the main banks were reluctant to lend to them.

Jobs minister Mary Mitchell O'Connor welcomed the announcement.

"It is very much in line with the thrust of the Government's Action Plan for Jobs, to make loans to micro-enterprises right across the country more affordable.

"I am very much aware that micro-enterprises are at the heart of rural Ireland and I want to create an environment for them to grow and develop right across the country," the Minister said. The news follows the recent appointment of Garrett Stokes as chief executive of MFI.

In Ireland there are around 183,000 SMEs with around 12,000 companies entering the market each year and a further 10,000 shutting down.

UK-lending firm BMS Finance entered the SME lending market here earlier in the year following a successful spell in the UK.

MFI has loaned out around €11.5m since it was set up and the Minister recently claimed that it's supporting in excess of 2,000 jobs.

Irish Independent

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